Code Section Group

Financial Code - FIN

DIVISION 25. Debt Collection Licensing Act [100000 - 100025]

  ( Division 25 added by Stats. 2020, Ch. 163, Sec. 3. )

CHAPTER 2. Licensing [100003 - 100017]

  ( Chapter 2 added by Stats. 2020, Ch. 163, Sec. 3. )

ARTICLE 1. Commissioner on Business Oversight [100003 - 100006.5]
  ( Article 1 added by Stats. 2020, Ch. 163, Sec. 3. )

100003.
  

(a) The commissioner shall administer this division and may adopt rules and regulations, and issue orders, consistent with that authority.

(b) Without limitation, the functions, powers, and duties of the commissioner include all of the following:

(1) To issue or to refuse to issue a license as provided in this division.

(2) To allow affiliated companies to be under a single license. The commissioner shall adopt regulations specifying what constitutes an affiliated company for these purposes.

(3) To revoke or suspend any license for a violation of this division or a violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.

(4) To keep records of licenses issued under this division.

(5) To receive, consider, investigate, and act upon a complaint made in connection with a licensee.

(6) To prescribe the form of and to receive applications for licenses and reports, books, and records required to be made or retained by a licensee.

(7) To subpoena documents and witnesses, and to compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division.

(8) To require information with regard to an applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of an applicant for collecting consumer debt, and if an applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of officers, directors, or managing members of the corporation, association, or other entity, or the general patters of a partnership.

(9) To enforce by order any provision of this division.

(10) To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division. The fees collected pursuant to this division shall not exceed the costs of administering this division.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

100003.3.
  

(a) The proceedings for a revocation of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(b) The commissioner may suspend or revoke a license if, after notice and an opportunity for hearing, the commissioner finds any of the following:

(1) The licensee violated this division or a regulation adopted or an order issued under this division.

(2) The licensee does not cooperate with an examination or investigation by the commissioner.

(3) The licensee violates Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code. The commissioner may adopt regulations that specify the factors that the commissioner will consider in revoking or suspending a license, including, but not limited to, the harm to the consumer, the frequency of the violation, and the number of prior disciplinary actions taken against the licensee.

(4) The licensee is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors.

(5) A receiver, liquidator, or conservator has been appointed for a licensee.

(6) Any fact or condition exists that, if it had existed at the time that the licensee applied for the license, would have been grounds for denying the application.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

100004.
  

(a) Notwithstanding any law the commissioner shall have the authority to conduct investigations and examinations of an applicant or licensee as follows:

(1) For purposes of determining whether an applicant is eligible for a license, or that a licensee is complying with the provisions of this division or any regulation or order of the commissioner, the commissioner may access, receive, and use any books, accounts, records, files, documents, information, or evidence that relates to debt collection, including, but not limited to, any of the following relating to the intent to, or the practice of, collecting consumer debt:

(A) Criminal, civil, and administrative history information.

(B) Personal history and experience information, including, but not limited to, independent credit reports obtained from a consumer reporting agency.

(C) Any other documents, information, or evidence that the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of those documents, information, or evidence.

(2) For the purposes of investigating violations or complaints arising under this division, the commissioner may direct, subpoena, or order the attendance of, and examine under oath, any person whose testimony may be required about the consumer debt or account of the debtor.

(b) In making any examination or investigation authorized by this section, the commissioner may control access to any documents and records of the licensee or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of a licensee have been, or are at risk of being, altered or destroyed for purposes of concealing a violation of this division, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct their ordinary business affairs.

(c) The commissioner may permit affiliated companies to be subject to a single examination. The department shall list all affiliated company names on the license and shall post them on the department’s internet website.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

100005.
  

(a) If, in the opinion of the commissioner, a person who is required to be licensed under this division is engaged in business as a debt collector without a license from the commissioner, or a person or licensee has violated any provision of this division, an order, or a regulation adopted pursuant to this division, or Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may do any of the following:

(1) After notice and an opportunity for a hearing, order the person or licensee to desist and to refrain from engaging in the business of further continuing the violation.

(2) After notice and an opportunity for a hearing, order the person or licensee to pay ancillary relief. The ancillary relief may include, but need not be limited to, refunds, restitution, disgorgement, and payment of damages, as appropriate, on behalf of a person injured by the conduct or practice that constitutes the subject matter of the assessment. A person or licensee may dispute an order to pay ancillary relief for an individual violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, if the same injured person brought an action for the same violation against the same person or licensee in court, the action resulted in a final judgment on the merits, and all damages, penalties, or fees have been paid to the injured person.

(b) If, in the opinion of the commissioner, a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), or a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, has violated Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, the commissioner may take the actions described in paragraphs (1) and (2) of subdivision (a).

(c) If, within 30 days after an order issued pursuant to subdivision (a) or (b) is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order shall be deemed rescinded.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

100006.
  

(a) Notwithstanding any law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section shall not be deemed to require the commissioner to accept electronic records or electronic signatures.

(b) For purposes of this section, the following terms have the following meanings:

(1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic record” also includes, but is not limited to, all of the following electronic documents:

(A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority.

(B) A financial statement, report, or advertising.

(C) A surety bond, rider, or endorsement thereto.

(D) An order, license, consent, or other authority.

(E) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority.

(F) A proposed decision of a hearing officer and a decision of the commissioner.

(G) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.

(H) A release, newsletter, interpretive opinion, determination, or specific ruling.

(I) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (H), inclusive.

(2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.

(c) The Legislature finds and declares that the Department of Business Oversight has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

100006.3.
  

(a) The commissioner may require an applicant for a license to make some or all of the filings with the commissioner through the Nationwide Multistate Licensing System & Registry.

(b) The commissioner may require an application to be made through the Nationwide Multistate Licensing System & Registry, and may require fees, fingerprints, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted by applicants and licensees through the Nationwide Multistate Licensing System & Registry.

(c) The commissioner may require licensees to pay annual fees through the Nationwide Multistate Licensing System & Registry.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

100006.5.
  

(a) The Debt Collection Licensing Fund is hereby established within the state treasury.

(b) All licensing fees collected shall be deposited into the Fees Account which is hereby established within the fund.

(c) All fines and penalties collected shall be deposited into the Penalties Account which is hereby established within the fund.

(d) All monies deposited into the fund shall be available to the commissioner, upon appropriation by the Legislation, for the purposes of this division.

(Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

FINFinancial Code - FIN1.